Ride it

It took but moments for the big banks to jack rates after the announcement on Wednesday. The first to move were BeeMo, RBC, the green guys and Scotia, followed by the maroon penguins, Desjardins, National and the rest of the gang of over-extended CUs like Vancity, Meridien and Coast Capital. So the prime is now 3.7%.

“The rate hike will raise clients’ cost of borrowing for loans linked to prime, such as variable-rate mortgages and credit lines,” wrote an RBC private bankers to clients.

“The latest monetary policy report, accompanying the central bank’s rate hike, notes that about one-quarter of outstanding mortgages have variable rates, and that clients with these mortgages will feel the impact of higher rates when they renew their mortgages.

The central bank also discusses the impact of rising rates on clients with five-year, fixed-rate mortgages, up for renewal in 2019 and 2020. Using certain assumptions, the report shows that these clients’ mortgage debt-service ratios will be negatively affected by higher rates. Such effects are part of the Bank of Canada’s projections. Says the report: “Estimates of the impact of higher interest rates are in line with interest rate sensitivities embedded in the [central] bank’s macroeconomic projections for household disposable income and consumption.”

Yes, your line of credit cost went up immediately. Interest is calculated on a daily basis, and the monthly charge is now greater (but four in ten people don’t pay it, increasing overall debt – now at a faster clip). Variable-rate mortgages were also upped, but for most people payments remain the same. More of your monthly now goes to interest and less to principal repayment. Yes, they got ya.

How about GIC and savings account rates? Right. Crickets. No change – with none really expected for days or weeks. You have to wonder why anyone looking for some growth (or safety) would commit a lot of money to a high-interest savings account. For example, one of the best deals around (among the banks) is CIBC, which will give you a monumental 1.6% on your cash – so long as you have more than $250,000 on deposit.

Apart from the fact 1.6% is less than inflation, and all of the interest is taxed at your marginal rate (so, you’re losing money), the deposit is not fully insured. The CDIC (Canada Deposit Insurance Corporation) limit for individuals runs out of gas at $100,000, so if the penguins were to expire – highly unlikely, of course – big HISA depositors are SOL.

Compare that with parking cash at your financial advisor’s shop. A money market fund holding guaranteed securities (short-term government bonds and notes) will pay 1.5% or better, and you’re covered with $1,000,000 in insurance under the Canadian Investor Protection Fund (if your guy is a CIPF member. Ask.).

Of course, a swell option in a rising rate environment is to own preferred shares.

These are a hybrid – part cowboy (equity), part accountant (bonds). They represent an ownership position in the company, but are considered fixed income since they’re much more stable than common stock and pay a fixed dividend. These day that’s about 4% and, of course, you can claim the dividend tax credit meaning far less for Justin & Bill than with a HISA. The bonus is that as interest rates increase, so does the value of preferreds – at least the rate reset variety (which dominate the Canadian market).

The best way to own these is through a well-established ETF, which will give you exposure to a basket of preferreds issued by blue chippers like the banks, insurance companies and big utilities. Most of these increased in price yesterday – so in times such as these preferreds can provide (a) protection from rising rates, (b) a nice, steady, guaranteed yield and (c) tax-efficient income, paid in cash every 90 days and (d) the potential of a capital gain. Try that with your bank account or tawdry GIC.

There could be a lot more to come before the central bank pauses for any significant length of time. The estimate is we’re 1.5% away from that point – six more quarter-point moves. That might take two years or longer. But it looks plausible, certainly as the US pursues its more aggressive course. Inevitably – sometimes reluctantly and hurtfully – we follow.

Real estate will lose more altitude. Savers will benefit modestly. Mortgage borrowers will pay a price. Those with lines of credit will feel it most. The rate-tightening cycle is far from over – in fact, we’re not even at the half-way point, if history’s any guide. So you might as well ride it.

119 comments ↓

#1 Can You Dig It? on 07.12.18 at 4:47 pm

TSX at all time highs despite of many household debt warnings, NAFTA threats, bond yields about to invert soon (21 basis points).

This is insane.

The market, we feel, is undervalued. – Garth

#2 [email protected] on 07.12.18 at 4:57 pm

I must have missed it, what are examples of well-established ETFs?

#3 Lost...but not leased on 07.12.18 at 5:01 pm

Phyrrzztt!

#4 Freebird on 07.12.18 at 5:01 pm

Did Mueller set a trap for Mr Manafort?

https://youtu.be/fm1oPXsFMGk

#5 High interest accounts on 07.12.18 at 5:02 pm

Actually BMO has a savings account 1.4 percent no min. As far as your 1.5 percent money market account, could not find any, best rate I found was 1.2.
I thought in the news today it said housing prices actually increase last month? But must be an average.
Houses are still moving pretty quick if Vancouver if it’s under a million. There’s a great horse farm for 6 million I wonder if they would take a low ball two million.
The squeeze is on, but I don’t see any blood in the streets and no one is talking about higher rates in daily conversation. I think your analysis is right people do not see it so there’s no Impact to the,.

#6 Shawn Allen on 07.12.18 at 5:03 pm

I agree with Mark

#127 The Real Mark on 07.12.18 at 3:26 pm agreed with me (well, apparently only mostly) and added…

“#121 Shawn Allen on 07.12.18 at 1:46 pm
Where Are the Debt Defaults?”

I believe also, in addition to your theories (which I mostly agree with) that there is a concerted effort at the lenders to not classify defaults as defaults.

************************************
Agreed. It is 90 day delinquencies that the Canadian Bankers Association tracks. So I suspect that well before 90 days late is reached the bank tries to make arrangements with the borrower so that the payment is lowered or something is done to allow the mortgage to not technically be in default at day 91. And, right, that’s on top of the ability of customers to skip a payment occasionally. It’s allowed in the contract. If a bank agrees to let you not pay then you are not technically in default. So, as a bank, to lower your default numbers, simply agree to let your borrowers skip payments.

#7 slam on 07.12.18 at 5:03 pm

I’m seeing more listings the GVRD area within my search criteria. And prices are slightly lower. Hope this trend continues.

Just received a promotion in one of the high interest savings account for 2.75% (better than 1.6%) It’s ok but not close to 4% from equities that pay dividends.
Hope this trend continues too.

That is likely a limited offer and the funds end up in an online bank that fronts subprime mortgages (like EQ). Careful. – Garth

#8 MSM-Free Zone on 07.12.18 at 5:07 pm

Excellent (and free) financial advice today.

Much more valuable than the Calculus/Algebra I learned in Grade 13 ( yes, millennials, there used to be a Grade 13 in Ontario for 67 years beginning in 1921).

Perhaps Drug Fraud should concentrate less on revamping the New Sex curriculum and place more emphasis on the New Math curriculum, you know, the really exciting stuff that gets your heart pounding like principal, interest, compounding, auto loans, mortgages, amortization, mutual funds, outrageous MER’s, and basic equity markets, etc.

Then again, both the Canadian Banking Association and the Canadian Real Estate Association might lobby hard against that idea. Too much skin in the game.

#9 Freebird on 07.12.18 at 5:16 pm

Wasn’t easy but we have most of right check marks and wotking on more. Took a wakeup call.

Another post to bookmark and pass on.

#10 dakkie on 07.12.18 at 5:19 pm

It “Hit the Mortgage Market Over the Head with a Baseball Bat”

http://www.investmentwatchblog.com/it-hit-the-mortgage-market-over-the-head-with-a-baseball-bat/

#11 The Real Mark on 07.12.18 at 5:31 pm

“#1 Can You Dig It? on 07.12.18 at 4:47 pm
TSX at all time highs”

Yet only up 0.8%/year nominally over the past decade. And down roughly -0.7% annually in real terms assuming a CPI of 1.51%/annum 2008-2018. Total returns, of course, include dividends, but the index level itself over the long term should bear significant correlation to nominal GDP growth.

Does anyone really believe that the Canadian economy experienced a real contraction in the past decade? What about the sheer enormity of the retained earnings in that period added to TSX constituent balance sheets?

Agree with Garth, the TSX is cheap. I’d go a bit further and say dirt cheap relative to Canada’s fundamentals, both in the past and the future.

Why so cheap? Simple. The housing market has attracted the hearts of Canadian speculators. But as that tide goes out, which it appears to be in the process of, the TSX should perform much better. Macro tailwinds such as higher global long-term interest rates should help as well.

#12 David on 07.12.18 at 5:42 pm

Thanks to this blog I gave up on real estate years ago. Not sure how the collective “we” will handle a white knuckle housing crash. Trying to steer my buddies at the coffee shop away from talking apocalypse and end times talk. If the fundamentals stink it is a lousy investment. Period and full stop. Dividends don’t lie and cap rates are easy to calculate.

#13 Please remove on 07.12.18 at 5:46 pm

Mr. Garth Turner, please remove your picture as it violates the woman’s privacy and her orientation. Thank you. I’m a Professor who teaches Critical Gender Theory at UofT.

#14 Juve101 on 07.12.18 at 5:51 pm

EQ bank pays 2.3%. How is that a problem as long as you stay under the insured $100K?
Could even open an account under the spouses’s name and another join account and park up to $300K insured combined.

#15 crowdedelevatorfartz on 07.12.18 at 5:52 pm

@#129 Lost
” High Rise….is this class of developer cabal is in meetings wondering WHAT TO DO?…”

+++++

A retired realtor I know said essentially the developer starts offering realtors juicy, higher than normal” commissions to flog their condos at a lower price…… essentially becomes a race to the bottom as other Developers jump on the bandwagon.

Gonna be an interesting Fall, Winter after a dismal sales Summer……..

#16 Mr.Slate on 07.12.18 at 5:56 pm

TSX at all time highs despite of many household debt warnings, NAFTA threats, bond yields about to invert soon (21 basis points).

This is insane.

“The market, we feel, is undervalued. – Garth”
###############################
Gartho,
You sound like a real estate agent. C’mon, the market is undervalued, really?

Yeah, really. – Garth

#17 Alex on 07.12.18 at 6:03 pm

“That is likely a limited offer and the funds end up in an online bank that fronts subprime mortgages (like EQ). Careful. – Garth”

How about Achieva, does it also front subprime mortgages? What are the risks?

#18 Flat Earth Society on 07.12.18 at 6:21 pm

#8 MSM-Free Zone

Have you seen how they teach math in schools these days? You should check out the “new math” and see how it works. On anything complicated you just guess and if you are close you get full marks. The days of long division are long gone.

#19 Howard on 07.12.18 at 6:23 pm

The Toronto Star is going hysterical because schools in Ontario will no longer be teaching Wynne’s pornography to kindergarteners.

Won’t someone please think of the children!

#20 Conspiracy Theory on 07.12.18 at 6:28 pm

Those meddling Russians are at it again, having fixed the England-Croatia game and foiling what could have been a one in a lifetime world cup match up. France vs. England would have been on every TV in Europe had it occurred.

Or maybe England just choked. The defense on both Croatia goals was horrible. Sometime destiny points at you and looks you right in the eye and you pee your pants.

#21 BlogDog123 on 07.12.18 at 6:32 pm

Where’s HHCE today to remind us yet again of the misery soon to fall upon the Shyster Realtors(R)?

#22 tccontrarian on 07.12.18 at 6:33 pm

“A money market fund holding guaranteed securities (short-term government bonds and notes) will pay 1.5% or better, and you’re covered with $1,000,000 in insurance under the Canadian Investor Protection Fund … ” -GT
————

So, how do you get protection when you have, say, $5M?
Open 5 different accounts?

TCC

Yeah, that’s a reasonable question. I hear it all the time. – Garth

#23 Nonplused on 07.12.18 at 6:35 pm

Still a long way to go with rate increases be for retired folks who have most of their money in fixed income are out of the woods, assuming they haven’t already used up all their capital in an effort to get by.

Funny how there is always 2 sides to every coin. On the one hand rising rates will squeeze over-indebted home owners but on the other hand retired people and pension funds should all catch a break as rates rise. Plus as pensioners income goes up Turdeau will see a slight increase in tax revenue.

Will the increase in fixed income be enough to offset the lost spending power of the highly indebted? I don’t know I think that would take some very fancy modelling, but my gut instinct would be that the money has to go somewhere, whether it be fixed income or bank profits, or in both cases more taxes.

I guess we’ll see.

#24 kommykim on 07.12.18 at 6:40 pm

RE: #2 [email protected] on 07.12.18 at 4:57 pm
I must have missed it, what are examples of well-established ETFs?

===================================

ZPR is a collection of Canadian rate reset preferreds only.

CPD is a blend of perpetuals and resets which reflects the S&P/TSX Preferred share index.

#25 Ray on 07.12.18 at 6:47 pm

#13 Please remove on 07.12.18 at 5:46 pm
Mr. Garth Turner, please remove your picture as it violates the woman’s privacy and her orientation. Thank you. I’m a Professor who teaches Critical Gender Theory at UofT.
———————————————-
Sarcasm right ?

#26 jess on 07.12.18 at 6:50 pm

https://www.thestar.com/business/real_estate/2018/07/12/torontos-rental-frenzy-spurs-highrise-dog-park-fleet-of-teslas.html

“enticed by new funding and lending initiatives from Canada Mortgage and Housing Corp., which will provide up to $3.75 billion in low-cost loans from 2017 to 2021 to encourage construction of apartment projects across the country.”

#27 akashic record on 07.12.18 at 6:51 pm

#16 Mr.Slate on 07.12.18 at 5:56 pm

TSX at all time highs despite of many household debt warnings, NAFTA threats, bond yields about to invert soon (21 basis points).

This is insane.

“The market, we feel, is undervalued. – Garth”
###############################
Gartho,
You sound like a real estate agent. C’mon, the market is undervalued, really?

Yeah, really. – Garth

Undervalued by how much? What would be the particular indicators that the trend is changing?

Shouldn’t the same monetary conditions that cool the RE market have similar effect for funding “market” investments?

#28 crowdedelevatorfartz on 07.12.18 at 6:53 pm

Any catatonic triskaidekaphobiacs out there?
Tomorrow’s the big day!

https://www.google.ca/url?url=https://en.wikipedia.org/wiki/Triskaidekaphobia&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwjBw_ay05rcAhVUM30KHc4YDvYQFggWMAE&usg=AOvVaw2BWCF-hS5WIoBmbbKHGmTx

#29 contemplator on 07.12.18 at 6:57 pm

RE: #2 [email protected] on 07.12.18 at 4:57 pm
I must have missed it, what are examples of well-established ETFs?

===================================

ZPR is a collection of Canadian rate reset preferreds only.

CPD is a blend of perpetuals and resets which reflects the S&P/TSX Preferred share index.
—————————————–

HPR – horizon’s active preferred ETF which out performs both more than the extra MER.

#30 For those about to flop... on 07.12.18 at 6:59 pm

Pink Lemonade Stand in Vancouver.

Featured these guys once before and they either removed it or the contract took its course but now it is up with 110k less for asking.

They purchased it for 1.99 at the detached peak of April 2016 and after the reduction the new ask is 1.88

I could soon be out of a job, but I am not worried as I flip a mean Kangaroo pattie.

Detached has hit the wall…

M44BC

2808 Wall Street,Vancouver.paid 1.99 April 2016 ass 1.76

Apr 25:$2,250,000
May 25: $1,998,000
Change: – 252000.00 -11%

Now asking 1.88

https://www.zolo.ca/vancouver-real-estate/2808-wall-street

https://www.bcassessment.ca/Property/Info/QTAwMDAwMlBLNQ==

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#31 Lost...but not leased on 07.12.18 at 7:05 pm

#20 Conspiracy theory

England’s mistake was scoring early….that riled the ancient eastern Europe DNA and it was Croatia dominating the game from that moment forward.

Love to be a fly on the wall in @ssh*le Gordon Ramsay’s latest overrrated kitchen as he watched them choke.

PS: France is now quivering in their quiches…

#32 Old gringo on 07.12.18 at 7:12 pm

Or for the brave at heart, south of the border
7.56% 90 days
7.74 % 130 days
7.88 % 210 days
8.06 % 360 days

#33 EJ on 07.12.18 at 7:12 pm

The market, we feel, is undervalued. – Garth

————————

Makes sense; since RE is so overvalued in many places people are not buying equities.

It is odd how people fear the normal ups and downs of a healthy market yet are blithely unaware that a single investment, like a house, is at greater risk of ups and, more likely now, downs.

#34 Janine Dawson on 07.12.18 at 7:13 pm

My cousins locked-in all his LIRA’s, RRSP’s, GIC’s, TFSA’s for 5 years. Their $800,000 turns into $961,679.85.

According to my calculations that is 4.0419% per annum, $32,335,97 guaranteed or 20.20% total in 5 years. It is all deposit insurance covered.

#35 Herestoyou on 07.12.18 at 7:16 pm

Just went into our bank last week to ask and their gic specials were 1yr 2% / 15 month 2.5% / 3 yr 3%. This is one of the big banks so we’ll wait a week or two to see if they go up even more.

Why would you ever buy one? – Garth

#36 Reynolds531 on 07.12.18 at 7:19 pm

I’ve owned CPD for many years. A lot of it. And for many years I’ve wondered if that was a good move. The long term chart doesn’t support me in my decision.

You made 4-5% a year, tax efficiently. Not bad. – Garth

#37 Lost...but not leased on 07.12.18 at 7:22 pm

#15 crowdedelevatorfartz

A website once existed that discussed how developers had carved up Metro Vancouver like Mafia turf. ie Richmond was under “X’……Tsawassen was under “Y”….so as not to compete.

Not long ago an article appeared how Vancouver developers were pissed off that one in their cabal had dared to pay over $35/sq ft for downtown site….the old downtown Canadian Linen site was bought for $100+/sq ft. back then ***gasp***.

Once they start to break ranks….watch out !

Realtors getting kickbacks is a sign of the start….next sign is usually blatantly offering upgrade packages to purchasers.

With greater CRA scrutiny,….. Eby report on BC casino money laundering, and B 20, stress tests etc….buying any new project is I-N-S-A-N-E.

How can anyone accurately gauge the solvency of the developer and/or fellow strata owners (aka someone want to draft a movie script with scenario of “Home Alone…only person living in a 400 unit/40 storey condo project?”

#38 Coast on 07.12.18 at 7:25 pm

Coast Capital’s 5-year fixed closed rate as of 1 minute ago is: 3.44%

As of June 2010 Coast Capital’s rate was 3.69% on a 5-year fixed rate closed. Same product.

So, 8 years later, we are still getting 5-year fixed rate mortgages for 0.25% cheaper.

I can tell you that their rates did dip as low as 2.4% on that 5-year fixed up until the opening of 2017.

#39 FOUR FINGERS WATSON on 07.12.18 at 7:28 pm

#16 Mr. Slate
You sound like a real estate agent. C’mon, the market is undervalued, really?

Yeah, really. – Garth
…………………………..

Garth is right. There are some very good bargoons to be had on the TSX right now. Check out the p/e ratios on some of the TSX 60, esp the banks.
https://www.dividendyields.org/tsx60-best-dividend-stocks/

#40 Arctic Gringo: Qalunaaq on 07.12.18 at 7:32 pm

Ride It – take the 403 to #6 south tomorrow. Port Dover is going to be overpopulated with two-wheeled ridin’ Hogs. Forego commentary for another day. Cruise down to the beautiful shores of Lake Erie. There should be no excuses this time around. It ain’t April anymore.

#41 TurnerNation on 07.12.18 at 7:32 pm

A quote from Maxim Salvo? (sounds IT):
“Real Estate always goes up?
So do the interest rates.”

2000 sqft new build townhouses from 900,000. 1.5m SFH. In Pickering? (I’m snickering.)

http://madisonfb.com/floor-plans/

#42 Stone on 07.12.18 at 7:33 pm

#22 tccontrarian on 07.12.18 at 6:33 pm
“A money market fund holding guaranteed securities (short-term government bonds and notes) will pay 1.5% or better, and you’re covered with $1,000,000 in insurance under the Canadian Investor Protection Fund … ” -GT
————

So, how do you get protection when you have, say, $5M?
Open 5 different accounts?

TCC

Yeah, that’s a reasonable question. I hear it all the time. – Garth

———

When I hit $5 million in investable assets, I’ll let you know how worried I feel about it. It’ll take a few years though. In the meantime, I hope you’re patient.

Instead, should we wonder about all our fellow compatriots who loaded up on 1, 2, 3 or more highly leveraged residential real estate properties with negative cash flow and no specuvestor insurance whatsoever? I don’t hear anyone concerned about that.

#43 For those about to flop... on 07.12.18 at 7:39 pm

Recent sale report/ Realtor assistance needed.

At risk at being snubbed for the 1,647 time in a row I will stick one of my two necks out on the line and try to find out what this house just went for in West Vancouver.

It sold 15 days ago.

Picked up for 3.68 in at the start of their adventures they were asking 4.19 but the last time of viewing the ask was 3.78.

Can’t imagine what ran through these guy’s heads when their assessment was lowered to 3.42 from 4.5.

Detached in West Vancouver is being severely choked out.

These guys woke up one morning in the Full Nelson…

M44BC

2592 Nelson Avenue,West Vancouver.

paid 3.68 April 2016 ass 4.5 now asking 3.78

Now assessed 3.42 2017

https://www.zolo.ca/west-vancouver-real-estate/2592-nelson-avenue

https://www.bcassessment.ca/Property/Info/QTAwMDAyOTRKVA==

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#44 preferred share etf on 07.12.18 at 7:40 pm

all they all similar? any recommendations anyone?

#45 conan on 07.12.18 at 7:49 pm

Forgot to give a big shout out to all the dogs in my neighborhood in yesterday’s blog.

Lots of kids in my area, so we get the “visits” from modern ice cream trucks. Last year these trucks would hang out for 15 minutes, or more, and never turn off their clown music.

This year is different, all of the dogs in the neighborhood have decided that these trucks are no longer welcome and they pack bark at it now. They scare the ice cream truck away.

Well done!

Dogs 1 Cats 0

#46 Shawn Allen on 07.12.18 at 7:52 pm

New Math?

#18 Flat Earth Society on 07.12.18 at 6:21 pm
#8 MSM-Free Zone

Have you seen how they teach math in schools these days? You should check out the “new math” and see how it works. On anything complicated you just guess and if you are close you get full marks. The days of long division are long gone.

*****************************************
I am not familiar with today’s “New Math”. But I do know that when I was in about grade 5 in 1970 there were complaints then that the schools were teaching “New Math”.

Well, maybe we never should have stopped teaching from “Euclid’s Elements” the most successful math text book ever that was actually used for over 2000 years!

https://en.wikipedia.org/wiki/Euclid%27s_Elements

#47 Andrewt on 07.12.18 at 7:56 pm

#19 Howard on 07.12.18 at 6:23 pm
The Toronto Star is going hysterical because schools in Ontario will no longer be teaching Wynne’s pornography to kindergarteners.

—-
Someone’s going hysterical…

#48 Long-Time Lurker on 07.12.18 at 7:57 pm

I had a German Shepherd when I was a kid. Yeah, I’m late, as usual.

#49 James Harrison on 07.12.18 at 8:02 pm

Interest rates these days are still pitiful. I remember in the year 2000 when I bought a 5 year GIC 6.6% compounded annually and got 37.65% total interest. My money was working at 7.53% a year when all said and done.

Inflation then was about 3%, so the real return was unspectacular. – Garth

#50 NoName on 07.12.18 at 8:05 pm

Older but interesting podcast with spending an hour and listening to it. I came across this when I was researching dining kroger efect. Although dun.kro.eff was never mentioned.

Tommy talks with New Yorker staff writer Evan Osnos about China’s frantic post-election efforts to build a relationship with Jared Kushner, and why the “Kushner channel” makes American counterintelligence officials so nervous. They also discuss the shockingly-wide distribution of sensitive intelligence in the Trump White House, and how Evan feels about the threat from North Korea roughly six months after his visit to Pyongyang.

https://art19.com/shows/pod-save-the-world/episodes/7e23a87c-c393-446d-b27e-8df0072114a1

#51 crowdedelevatorfartz on 07.12.18 at 8:22 pm

@#37 Lost….leased

#52 Whimp on 07.12.18 at 8:32 pm

Wow, just when I thought I might be able to get a place to live and call my own, I find out that to be an owner/builder in BC, you need to have the CPO. A complete scam, everyone should look this up. The only way I can get a place that is right for me and my wife, is to build and do it all myself. No other way on one income, just before my builders mortgage was approved, the building inspector here told me about having to apply, qualify, be invited to and write an exam at one of their approved facilities for a fee of $475. You need to own the property to qualify to write the exam, if you can’t pass your stuck with using a general contractor, who are absolutely gouging right now. This is sickening. Now back to facing homelessness with my disabled wife, wow, what a great country. Garth, please look into this HPO requirement for people wanting to be their own general contractor in BC. The lady that was going to approve my mortgage didn’t have a clue about it. The friend that drew up my plans, construction manager, also didn’t know this was required. This is driving up costs a ton! and taking people that can only afford a home by building themselves, like me, completely out of the game. This is a cash grab, look it up, completely stacked to benefit the construction companies
if your caught building as an owner without this stupid exam, you face a $25K fine, most people, including bankers don’t even know about it! feel bad for all the people that go get their builders mortgage, then find out it’s going to cost %50 more than they budgeted to build through some expensive , hack GC

#53 waiting on the westcoast on 07.12.18 at 8:32 pm

28 crowdedelevatorfartz on 07.12.18 at 6:53 pm
“Any catatonic triskaidekaphobiacs out there?
Tomorrow’s the big day!”

I’m a -phile…

Parents married on a Friday 13th at 1300 hours
There was supposed to be 14 people at wedding but 1 person was delayed so 13 attended.

Good luck for me… or maybe I should check my hairline for a series of 6s

#54 conan on 07.12.18 at 8:32 pm

#31 Lost…but not leased on 07.12.18 at 7:05 pm

“PS: France is now quivering in their quiches…”

Croatia is only 4 million people, amazing they could field such a good team.

Total player salaries:

France: 636.5 million Euros

Croatia: 294.8 million Euros

It will be a crazy good game.

#55 Alex on 07.12.18 at 8:32 pm

CPD preferred ETF took a 30% dive during the 2008 financial crisis. Yes, yield is attractive and you can hold these forever in a non registered account but do not count on them in case of a market downturn. You will have to sell them at a loss in order to buy more equities. With GICS, your money is stuck and will not be available when you need it most in case of a crash to buy once again, equities.
These days, I am swing trading the S&P500 and have fun doing it. I can’t wait for the next crash to buy on the cheap for long term holding.

#56 The Real Mark on 07.12.18 at 8:38 pm

“#49 James Harrison on 07.12.18 at 8:02 pm
Interest rates these days are still pitiful. I remember in the year 2000 when I bought a 5 year GIC 6.6% compounded annually and got 37.65% total interest. My money was working at 7.53% a year when all said and done.”

2% of that went to taxes, 3% to inflation. The real tragedy at the time was neglecting the deeply out of favour resource shares, although crashes in 2008, and more recently in the 2015-2016 time frame gave another opportunity.

In hindsight, the TSX ex-Nortel was also reasonably valued and did well going forward. There were some ETFs available at the time that were specifically structured to avoid Nortel. The average Canadian managed investor didn’t suffer too seriously in the Nortel collapse due to the regulators fortunately having concentration limits on Canadian funds for such. Canadians will suffer far more severely and systemically in the RE crash as there are no concentration limits on RE in the portfolios of Canadians.

#57 Tony on 07.12.18 at 8:47 pm

Re: #27 akashic record on 07.12.18 at 6:51 pm

The U.S markets are the most overvalued since 1873. Barring a huge commodity boom the TSX is at the mercy of the major U.S. market indexes just like I always tell Mark or The Real Mark but he never gets it. When Trump’s gone so is his money.

#58 crowdedelevatorfartz on 07.12.18 at 8:53 pm

@#37 Lost …… leased

Yep.
I’m noticing “For Lease” signs cropping up everywhere and it may be businesses fleeing the inner cities to the cheaper burbs but empty commercial property still hurts the owners.

Lingering “For Sale” signs seem to also be a “sign” of the times.
We’re almost half way through the prime selling season and sales are still dropping.
Not good if you’re a realtor with bills to pay.
One wonders when a Canadian Realtor will anonymously write a “Best Seller” about their slimey sales practices …… it’s long overdue….
and unemployed realtors gotta earn a buck any way they can.

#59 Linda on 07.12.18 at 9:29 pm

I could rage about how financial institutions are so quick to increase the cost of borrowing & so slow to increase the interest paid to those who save, but why bother? I’d rather have more pictures of Bandit to smile at:) Tax free & always a capital gain in happiness…..

#60 Vancouver on 07.12.18 at 9:42 pm

Garth, what do you think about parking money temporarily at Tangerine? They seem to be good with rates? Is it safe?

Thanks for your help

#61 crowdedelevatorfartz on 07.12.18 at 9:43 pm

@#53 Waiting….
“… or maybe I should check my hairline for a series of 6s”

++++

Only if your first name is…….Damien….?

#62 mike from mtl on 07.12.18 at 9:59 pm

#55 Alex on 07.12.18 at 8:32 pm
CPD preferred ETF took a 30% dive during the 2008 financial crisis. Yes, yield is attractive and you can hold these forever in a non registered account but do not count on them in case of a market downturn.

/////////////////////////////////////////////////////////////////////

That and from say 2013 to 2016 oil bust and rate cuts.

Yield is good however understand the very real risks, these are not bonds. It’s like a combo of the worst of equites and long bonds.

And I disagree that preferreds rise with short rates, no more like the 10yr. Which is why they’ve actually been shedding gains recently.

#63 Reality is stark on 07.12.18 at 10:14 pm

The USA/Canada border will become a serious contentious issue going forward.
The NAFTA deal is toast.
We really don’t have a lot of trade outside the USA and our homeland security is weak.
In the not too distant future there are likely to be a lot of illegals trying to get into the USA from Canada. The USA may force our leaders to build a wall so that illegals that make it to Canada then make their way into the USA. Once the agreement is gone and our youth unemployment reaches 40% many of our young people will try to illegally emigrate.
Canadians are complacent but need to understand the implications of a much lower standard of living going forward. People have been living well beyond their means in this country for decades.
We are hewers of wood and drawers of water, nothing more. Reality is about to hit home.
In a couple years we are about to experience a 25% reduction in living standards. It’s high time people experience the pain associated with the impending poverty.
Those currently heavily indebted with real estate will never recover.
Americans have always wondered why we see ourselves as superior socialists.
We will show them how poverty suits us and how well we can wallow in it.

#64 Vancouver on 07.12.18 at 10:24 pm

Hi Garth
Thank you for your informative posts!
Can you please advise if holding funds with Tangerine (online bank) would be considered safe if under 100K per account? You mentioned that these type of accounts are sometimes used as forefront for subprime mortgages. Is this true for Tangerine? Just curious…

Thank you

#65 Leo Trollstoy on 07.12.18 at 10:28 pm

If you don’t know your rate of return you either have too much money, or no money

Interest rates going up

Economy strong

Deflation non-existent

Called it

You’re welcome

#66 Ponzius Pilatus on 07.12.18 at 11:11 pm

#38 Coast on 07.12.18 at 7:25 pm
Coast Capital’s 5-year fixed closed rate as of 1 minute ago is: 3.44%

As of June 2010 Coast Capital’s rate was 3.69% on a 5-year fixed rate closed. Same product.

So, 8 years later, we are still getting 5-year fixed rate mortgages for 0.25% cheaper.

I can tell you that their rates did dip as low as 2.4% on that 5-year fixed up until the opening of 2017.
————
Garth,
Please educate the ignoramuses on this blog.
BOC only sets variable rates.
Long term fixed rates are set by the bond market.
Yees.

#67 Jimers on 07.12.18 at 11:17 pm

Wow, just wow! Trump is kicking but and takin names. Luv it! The world will be a better place when the swap is flushed. Where is Mr. O’Leary when Canada needs him, being coddled by his wife?

#68 the Jaguar on 07.12.18 at 11:43 pm

#42 stone “Instead, should we wonder about all our fellow compatriots who loaded up on 1, 2, 3 or more highly leveraged residential real estate properties with negative cash flow and no specuvestor insurance whatsoever? I don’t hear anyone concerned about that”

Why would accountability for their actions wash up on everyone’s beach? They made their investment bed with eyes wide open. There ain’t no ‘Nanny State ‘stepping in on bad choices just yet. (Thankfully). There would be a stampede to the exits otherwise.

Risk, Choices, Outcome, Consequences. While a hand up might be forthcoming in situations where the decision was made with a poor outcome based on an effort to improve conditions or outcome for all (compassionate response), throwing the dice in the name of greed will attract no rescue buoy from the herd. Enough said.
The best outcome is an opportunity for better choices, character building, and gratitude to have survived it with family and friends intact. Sometimes known as ‘Take your lumps’.

#69 Ponzius Pilatus on 07.12.18 at 11:50 pm

Do you rally want these two demented wrinkles run the world?
http://m.spiegel.de/politik/ausland/donald-trump-theresa-may-hat-den-brexit-verbockt-a-1218189.html

#70 The Real Mark on 07.13.18 at 1:20 am

“#34 Janine Dawson on 07.12.18 at 7:13 pm “

Hi Janine, thank you for posting here.

Usually when most posters (including Garth) speak of returns, we speak of annual returns on a geometric, compounded basis.

So a 20.2%/5 year return is actually 3.75% annualized compounded.

Which isn’t bad if that’s all a locked-in GIC in a tax efficient account. Although as Garth enthusiastically points out, there’s usually much better returns to be had through a balanced and diversified portfolio with periodic rebalancing.

#71 Stan on 07.13.18 at 1:58 am

Garth, I think you should always put in the FIRST post.

#72 Longterm on 07.13.18 at 2:39 am

#52 Whimp on 07.12.18 at 8:32 pm

Yep, it’s an expensive ball ache. Wait until you apply for a building permit. In the Regional District of Nanaimo, my application fee for the permit alone was another $1000 on top of the $475 paid to the HPO, which is required or no building permit will be issued, and then another $3000 for the building permit itself. Still, that being said once I’m finished building I reckon I’ll have saved about $200k over having had a contractor build my house and I’m way pickier with respect to energy efficiency, air tightness, low-impact and healthy materials than any contractor I know of.

If I can give you one piece of advice. To save a ton of money and time, build a small house on a simple rectangular floor plan as close to a square as possible [larger SF for the perimeter]. Smaller than you think you need. A shed roof design with a relatively low pitch roof. And I’ll repeat, smaller than you think you need. Every cost is a function of size. So again, smaller than you think you will need.

#73 Smoking Man on 07.13.18 at 2:51 am

How do I know I’m going to die soon.

Tax farm boss is a rock star. The team love me.

Forex I’m killing it. Today the 12th is my birthday.
I’m 59 today, was born in 59. Omen.

I’ve never been happier in my entire life. Me and the wife connected. 35 years. My autistic dog Wyatt waged his tail for the first time.

Turn to my left, ocean, to the right mountains.
Writing inspiration from the homeless that surround me.

Friday 13th. Tomorrow and I’m going to Vegas again.

What could go wrong.

I love all you bastards. Including the ones that hate me. Especisly them.

Nictonight code..

#74 Conspiracy Theory on 07.13.18 at 3:00 am

#31 Lost…but not leased

I disagree. In all sports the strategy is to score first and then score more often. England forgot the second half of the equation. They let a “come from behind win”. No excuse for that at such a high level of play. It means they were already celebrating and forgot to play the rest of the game. It’s like a guy spending a lot of money celebrating his stock option gains but then forgetting to sell any of them before they crash.

#75 Conspiracy Theory on 07.13.18 at 3:11 am

#54 conan

Odds are France wins. Croatia couldn’t have beat England if England didn’t choke. England didn’t think they had to play defense after they were up by 1, just keep it in the other end. France is watching the tapes right now and they won’t make the same mistake.

My call would be France wins 2-0.

#76 TSX on 07.13.18 at 4:25 am

#11
Who cares if you don’t get capital gains on your TSX stock.
As long as you have been holding corps that pay well when distributing dividends.
And yeah, cap gains will happen at some point if you hold TSX multiple decades until retirement.

#77 Dolce Vita - Wage Increases on 07.13.18 at 4:25 am

NEW & OTHER wage increase data surfaces.

As I have posted here before, Labour Force Survey June:

2/3 job gains were the “Self-Employed” which also counts babysitters and newspaper delivery boys and 2009 StatCan study showing 1.6/2 MM had no employees but themselves (80%).

To me, the Self-Employed = “The New Unemployed” to make job creation look great again.

Why I was suspicious of this much heralded CDN wage gain MSM hysteria and below is EVIDENCE for my apprehension.

Here are wage gains also reported by other RELIABLE sources, judge for yourself (and look at whom is conspicuously bullish):

https://i.imgur.com/nBqzy9Y.jpg

Ya, the average wage gain was: FLAT.

1.5 yrs of FLAT, FLAT, FLAT and FLAT. Otherwise, we would have seen a maelstrom in Consumer Spending, correct? We didn’t.

Why I do not rely on our “many bricks short of a full load MSM” that just pass on numbers and headlines and do NO critical thinking of their own.

#78 NEVER GIVE UP on 07.13.18 at 4:29 am

#52 Whimp on 07.12.18 at 8:32 pm
Wow, just when I thought I might be able to get a place to live and call my own, I find out that to be an owner/builder in BC, you need to have the CPO. A complete scam, everyone should look this up. The only way I can get a place that is right for me and my wife, is to build and do it all myself. No other way on one income, just before my builders mortgage was approved, the building inspector here told me about having to apply, qualify, be invited to and write an exam at one of their approved facilities for a fee of $475. You need to own the property to qualify to write the exam, if you can’t pass your stuck with using a general contractor, who are absolutely gouging right now. This is sickening. Now back to facing homelessness with my disabled wife, wow, what a great country. Garth, please look into this HPO requirement for people wanting to be their own general contractor in BC. The lady that was going to approve my mortgage didn’t have a clue about it. The friend that drew up my plans, construction manager, also didn’t know this was required. This is driving up costs a ton! and taking people that can only afford a home by building themselves, like me, completely out of the game. This is a cash grab, look it up, completely stacked to benefit the construction companies
if your caught building as an owner without this stupid exam, you face a $25K fine, most people, including bankers don’t even know about it! feel bad for all the people that go get their builders mortgage, then find out it’s going to cost %50 more than they budgeted to build through some expensive , hack GC
===================================

At ground level your average Chinese citizen enjoys much more business and work freedom than Canadians. Our system is much more oppressive than the Soviet system according to my close friend who lived in it.

Everyone here wants their Cut, They want their Turf carved out and protected like the mob.

Look at Dentists with their Protectionist system and no competition clauses.

Look at everything from Taxi Cabs to Construction to Accounting. Everyone has a College or an Association or a Union to protect their turf. Keep out the low life. Keep the bar artificially high and keep our incomes correspondingly high.

O, what a tangled web we weave when first we practice to deceive! – Walter Scott

Sorry for your pain. Now go out and figure out how to game the system!

#79 Oft deleted much maligned stock.picker on 07.13.18 at 7:16 am

#36 Reynolds…..CPD a dog….I beg to differ. I’m a stock picker and I rarely look at fixed income…..naked like a baby. normally hate bonds….up market or diwn thete slways active stocks to trafe. But….the kadt couple of years were a cause to learn risk management ….agsin. So when Garth schooled me about preferreds I backed up the truck with cash on hand at $11.37. it’s $14.25 today…plus the divvie…..I’m a Garth fan on this issue…..thx. CPD had performed better than ZPR for whatever reason. The CPD I’d buy again….the ZPR is now FTS and ENB. Just my two cents.

#80 crowdedelevatorfartz on 07.13.18 at 7:19 am

@#63 Your Reality is delusional
“We are hewers of wood and drawers of water, nothing more. ”
+++++
Canada?
Try again.
We’re hewers of paperwork and drawers of emails…….

#81 Josh Simpson on 07.13.18 at 7:37 am

The poster mentioning about 6.6% 5 year GIC rates back in 2000, I went to Bank of Canada’s inflation calculator and total inflation from 2000 to 2005 was 12.43%.

This is a 2.486% per year inflation in Canada. The last 5 years from 2013 to 2018 the same Bank of Canada inflation calculator shows 8.64% total inflation in Canada or 1.728% per year inflation in Canada.

GIC rates at most were in the 2.85% to 3.1% back in 2013 or 5 years ago. So GIC rates were around 55% to 60% less or 3.5% to 3.75% less simple interest per year but as high as 4.23% less compound interest per year but inflation was only 0.76% more per year.

GIC investors are really getting much less annual rates of interest the last 5 years and are not getting compensating for inflation these days either. GIC rates should be at least getting 4.75% to 5.0% per year.

The Fed even said that they know savers are being used as casualties in the interest rate cutting and QE game.

GIC and HISA ‘investors’ will continue to pay a stiff price for their poor choices. – Garth

#82 Tater on 07.13.18 at 7:51 am

22 tccontrarian on 07.12.18 at 6:33 pm
“A money market fund holding guaranteed securities (short-term government bonds and notes) will pay 1.5% or better, and you’re covered with $1,000,000 in insurance under the Canadian Investor Protection Fund … ” -GT
————

So, how do you get protection when you have, say, $5M?
Open 5 different accounts?

TCC

—————————————————————-
Such a financial sophisticate and yet you’ve never heard of a custodian??

#83 Whimp on 07.13.18 at 8:34 am

#72 long term. How hard was the exam? And where did you get study materials? I see a realtor, of all people, fighting this stupid regulation, he’s offering a bunch of exam questions. The problem I’m having is the property owner wants an offer this month or he’s going with a realtor, price goes up. The bank will gove me one year to build, it’ll be after August now before I can get the certification and too late to build this year, so I’d have to wait until next spring to start. I’m depressed, just got the rug pulled out from under me, I’ve got plans drawn up, BIL’s an electrician, said he’d wire it for free, brother is a carpenter, would also pitch in with taping it out, I’m from a cunstruction background, worked on tons of projects. Fortunately here, in the region, no building permits are required, only way I could afford to own in this insane market. How long does it take to get approved to write the exam?
I planned on a simple square box like you said, slab on grade, in floor heat (friends a plumber, helped design it) HRV, but a scissor truss and vaulted ceiling, 9’ instead of shed roof. I was looking at construction materials that were new old stock, usually less than 1/2 price in windows ect. But, now looks like it’d back to the drawing board, maybe a mobile home, or move somewhere more affordable, my pathetic government salary doesn’t support the price of living here

#84 Whimp on 07.13.18 at 8:40 am

#78 never give up. I agree 100% with you, this is so controlled it’s sick.
I’m learning some hard lessons trying to work this system. I make just enough money to not qualify for any breaks from the government like grants ect. Since I have a sick wife, she’s a big liability each month and needs barrier free living. Landlord is trying to force me to buy the old shack I’m living in, that doesn’t work for wheelchair accessibility and is a teardown. There’s no way I’m buying that shack from him, only reason I’m renting it is because of our circumstances, it does have a ramp and is one level. Anyway, I’m opnen any advice on how to game the system

#85 Samantha Richardson on 07.13.18 at 8:53 am

I have been reading this forum on this forum and I don’t know why savers have been seen as the problem or targeted in a bad light in the media in recent years.

Our family are great savers and have a strong work ethic. We were taught to try to avoid depending on others and be responsible in many ways. This is what gave us less and less dependency on a paycheck etc.

This is why I know now that interest rates on deposits which is the reward for preparing for the future and helping keeping people on the positive side of money is being repressed.

The clear and simple fact is most savers will save more and more because low interest rates will just keep making them to do so out of necessity but only make the debt accumulators deeper in debt and those that can’t act responsible with their lives.

They will be paying a long term high price called interest and debt payments for decades. This is why this lower interest rates oldest trick in the book has not worked and will not continue to work.

Much higher interest rates were sued in the past to curb speculation in housing and other areas and to keep debt, deficit financing under control. This is what worked and will continue to work. This is why the U.S. Federal Reserve and Bank of Canada had no choice but to stop the insane cheap money train that was clearly a big mistake and a desperation move.

#86 crowdedelevatorfartz on 07.13.18 at 8:58 am

@#84 Whimp

Nothing wrong with owning a mobile home.
I have a friend on the Island that has one.
Obviously all ground level ( for your wife).
2 HUGE bedrooms, 2 bathrooms, laundry room, HUGE kitchen, HUGE living room.
Nothing wrong with a mobile home especially if you stick it on your own ppty to avoid “pad fees” and you avoid the govt regulatory horsesh!t cash grab.
He bought it used for 74k and paid about 5k to move it and connect it.
Or just buy one/ rent one in an existing trailer park and pay the pad fee.

Rent elsewhere for a year until you figure out your situation.
Do NOT buy that piece of crap from your landlord. He’s trying to pressure you to buy off his problems and he knows you’re in a tight spot. Scum.

#87 Rick Danger on 07.13.18 at 9:22 am

Canadian Tire bank (online only) HISA is 1.5% no minimum. Easy transfers, CDIC insured.

With inflation at 2% why would anyone invest for 1.5%, taxable? – Garth

#88 Karl on 07.13.18 at 9:44 am

I’m looking at possibly heading East. GTA is becoming too much for me.

Garth, would you consider Ottawa or Halifax as being “good RE markets”?

If you mean less expensive and less volatile, yes. – Garth

#89 Tbone on 07.13.18 at 10:10 am

# 60 vancouver

Tangerine has been safe for me .
Started using them 20 years ago when they were ING
Scotia bought the canadian operation a few years back.
I parked a sizable amount of cash there in a 1 year gic at 2 % .
Matures in december . Probably do another 1 yr again.

And it will still be all there when the market corrects.
You don’t need to be fully invested in the market , contrary to what others
will tell you . It’s ok to have some cash .
I don’t think scotia bank will be going out of business any time soon.

#90 Karl on 07.13.18 at 10:10 am

If you mean less expensive and less volatile, yes. – Garth

Yeah, I guess that’s pretty much what I meant. The rest is subjective. I am just losing grip over how expensive and how overcrowded the GTA is becoming.

#91 Ponzius Pilatus on 07.13.18 at 10:21 am

#87 Rick Danger on 07.13.18 at 9:22 am
Canadian Tire bank (online only) HISA is 1.5% no minimum. Easy transfers, CDIC insured.

With inflation at 2% why would anyone invest for 1.5%, taxable? – Garth
——————-
I heard the interest is paid in Canadian Tire money.
Be careful.

#92 Renter's Revenge! on 07.13.18 at 10:38 am

#87 Rick Danger on 07.13.18 at 9:22 am
Canadian Tire bank (online only) HISA is 1.5% no minimum. Easy transfers, CDIC insured.

With inflation at 2% why would anyone invest for 1.5%, taxable? – Garth

=================================

Sometimes central banks use financial repression to revive a deflating economy, sometimes people choose to financially repress themselves. Who are you to judge?

#93 Penny Henny on 07.13.18 at 10:57 am

#44 preferred share etf on 07.12.18 at 7:40 pm
all they all similar? any recommendations anyone?

//////////////////////////////

I saved this from the comment section from a few years ago
-CPD(passive) owns the whole preferred market, including Bombardier and Aimia(Aeroplan). Their weighting system also gives extra weight to stocks near par(~$25). These preferreds have no upside and only the yield. It also owns a big majority of perpetuals, which will under-perform in a rising interest rate environment.

XPF(passive) owns 50/50 the Canadian preferred market and the US preferred market.These are two completely different markets. More than just geographically different. It also has the same problems as CPD.

DXP(active) owns more rate resets than perpetuals. These perpetuals are used to hedge the volatility of the rate resets. It also owns more discount preferreds(which have capital upside as well as a juicy dividend) than premium and par preferreds. They can also disregard companies that have serious credit problems(Bombardier and Aimia) as they have no obligation to pay their dividend. For ~.08% more fees you get much better management with a high probability at much better performance, low probability of matching the market, and a minuscule probability of under-preforming the market.

Other Canadian Preferred ETFs: RPF (active) run in a very similar way to DXP. Also a really good manager in charge. I would say these two are the ones to watch in this space.

ZPR(passive) Owns only Rate resets in a laddered equal weighting(over 5 years). It has increased weightings for issues in the years that have less issues, since each year must equal each other. ex. year 1 and year 2 has $5000 each. Year 1 has 5 issues so $1000 for each issue. Year 2 has 10 issues, so $500 for each issue. This is a stupid way to have the weightings.

HPR(Active) Owns mostly Rate Resets, but I don’t know that much about the manager or their mandate.

HFP(Active) Owns only floating rate preferreds and other floating rate derivatives. Highly one directional(will only make money in a rising rate environment). I also don’t know the manager or their exact mandate.

The preferred market is a good part of a complete breakfast.

You have a good knowledge of preferreds but not of CPD. It holds just 19% perpetuals and 78% fixed resets.-Garth

#94 dharma bum on 07.13.18 at 11:06 am

“So you might as well ride it.” ~ Garth
——————————————————————–

Heed the words of the late great Bruce Lee:

“You must be shapeless, formless, like water. When you pour water in a cup, it becomes the cup. When you pour water in a bottle, it becomes the bottle. When you pour water in a teapot, it becomes the teapot. Water can drip and it can crash. Be water my friend.”

― Bruce Lee

https://www.youtube.com/watch?v=cJMwBwFj5nQ

#95 oldtimer on 07.13.18 at 11:13 am

what is wrong with gold under the mattress like my grandmother had

#96 neo on 07.13.18 at 11:17 am

Cool story Garth but the 10 year is still sitting at 2.83%. All this Trump inflation talk and interest rate hikes and it still can’t even get over the mendoza line of 3.00% as I’ve said many times. Based on what you’ve written the 10 year should be at least 3.50% by now.

#97 Slowly Boiling Frogs on 07.13.18 at 11:23 am

#32 Old gringo on 07.12.18 at 7:12 pm

Or for the brave at heart, south of the border
7.56% 90 days
7.74 % 130 days
7.88 % 210 days
8.06 % 360 days
—————————————————-
Can you please provide a link or source for this.

#98 Trumpocalypse2018 on 07.13.18 at 11:41 am

Friday the 13th.

Trumpocalypse goes global, starting today in England.

You will not forget this day. For most, this will be your last summer.

PREPARE

#99 Ronaldo on 07.13.18 at 12:22 pm

#95 oldtimer on 07.13.18 at 11:13 am

what is wrong with gold under the mattress like my grandmother had
————————————————————–
Causes back problems.

#100 TheDood on 07.13.18 at 12:24 pm

“my pathetic government salary doesn’t support the price of living here”

You and nearly everyone else here.

https://business.financialpost.com/real-estate/its-not-just-sky-high-home-prices-that-make-vancouver-so-unaffordable-its-paltry-wages-too?video_autoplay=true

This is something very few pay attention to and will be THE primary reason (along with normalized rates) for a protracted house melt which might carry on for the next 10 years. NOBODY in YVR makes the kind of $ required to buy here!

#101 Scott Hanson on 07.13.18 at 12:25 pm

Oldtimer

Central banks more than ever manipulate gold, silver etc. This is why gold and silver had big run ups ever decade or two.

The next big run up will probably be 2019 to 2020 but not as high as last time. I would not be surprised at $2,000 Canadian an ounce by 2020.

I bought gold at $300 Canadian and sold it at $1925 Canadian. It was not the top but close.

I did buy some at $1,285 Canadian and now can set it at $1,600 Canadian about 2.5 years ago. This is a 24.5% in 2.5 years close to 10% a year.

I don’t put all my money in gold, 10% to 15% is what I am comfortable with.

#102 D-day on 07.13.18 at 12:54 pm

if the market is considered undervalued is b/c the value of money continues to decline amid the false inflation numbers

#103 it burns on 07.13.18 at 12:58 pm

Another for the Flop files found on my area radar.

2808 Wall Street, Vancouver
Bought 12-Apr-2016 $1,990,000
Listed 25 Apr-2018 $2,250,000
12 Jul-2018 $1,880,000
Change: – 370000.00 -16%

https://www.bcassessment.ca/Property/Info/QTAwMDAwMlBLNQ==

#104 Ubul on 07.13.18 at 1:28 pm

“In Toronto, for instance, in order to provide a shelter bed, it costs $3000 per month.”

Blows the mind! The reporter forgot to ask the most obvious questions: How much?! Why?

CBC, the Current… @ 40:50 minutes.

http://www.cbc.ca/radio/thecurrent/the-current-for-july-13-2018-1.4744453

For $2500-$3000 right now 187 full apartments are available in Toronto.

https://www.torontorentals.com/toronto?rent-max=3000&rent-min=2500

#105 robert james on 07.13.18 at 1:58 pm

#98 Trumpocalypse2018 ……………… Don`t tell me the idiot tried to grope the Queen !!!!

#106 jess on 07.13.18 at 2:12 pm

trumps calls witch hunt /more like Warlocks

“Russian GRU officers hacked the website of a state election board and stole information about 500,000 voters,” Rosenstein said. “They also hacked into computers of a company that supplied software used to verify voter registration information

https://www.cnn.com/2018/07/13/politics/russia-investigation-indictments/index.html

…’The defendants worked for two units of the GRU that “engaged in active cyber operations to interfere in the 2016 presidential elections,” Rosenstein said. One unit stole information using spearfishing schemes and hacked into computer networks where they “installed malicious software that allowed them to spy on users and capture keystrokes, take screenshots and exfiltrate or remove data from those computers.”…

#107 tccontrarian on 07.13.18 at 2:49 pm

#20 Conspiracy Theory on 07.12.18 at 6:28 pm
” …

Or maybe England just choked. The defense on both Croatia goals was horrible. Sometime destiny points at you and looks you right in the eye and you pee your pants”
———————————
Croatia has 2 of the best midfielders in the world in Modric/Rakitic – and their dominance showed as the game wore on. England has its ‘stingers’ in Cane etc but Croatia has class (in football-speak), and balance in terms of the ability to defend, attack, score, and game-management. No weaknesses that I can see – so I actually pick them over France in the Final.

But France have Mbappe/Pogba/Griesmann/ – and they can turn a match on its head!

I hope for a world-class spectacle and may they both bring their “A” game in the Final. Can’t wait…

TCC

#108 James on 07.13.18 at 2:49 pm

#105 robert james on 07.13.18 at 1:58 pm

#98 Trumpocalypse2018 ……………… Don`t tell me the idiot tried to grope the Queen !!!!
_________________________________________
Nope but the big dumb piece of $hit broke proper etiquette several times and one point walking in front of the queen. It may sound dumb and very royal but she is the queen and he is a lowly pleb. I’m not much of a royal watcher but she is “The Queen” Trump is a ugly dumb low life that invokes the “Ugly American” term every time he talks. “We have the best, we are the biggest, we are always first, my way or the high-way.”

#109 James on 07.13.18 at 2:57 pm

#98 Trumpocalypse2018 on 07.13.18 at 11:41 am

Friday the 13th.
Trumpocalypse goes global, starting today in England.
You will not forget this day. For most, this will be your last summer.

PREPARE
____________________________________________
Sitting here on my Harley in Port Dover. Its sunny, hot parked my bike and having cold beer with my buddies. Now this is what being a real man is all about. Smoking Man take some notes here you old coote! Im just out of this shot at Lago Tratorria.

https://www.portdovermapleleaf.com/

#110 Mike in Toronto on 07.13.18 at 3:02 pm

#104 Ubul

Shelter beds are short term furnished accomodations with security, staffing etc, etc.

If people could be trusted not to foul the hallways or get in fights in common areas, then sure, it could be a lot cheaper.

This has been known for years. Put the homeless who can take care of themselves in apartments and everyone comes out better.

#111 Ubul on 07.13.18 at 3:08 pm

#108 James on 07.13.18 at 2:49 pm

#105 robert james on 07.13.18 at 1:58 pm

#98 Trumpocalypse2018 ……………… Don`t tell me the idiot tried to grope the Queen !!!!
_________________________________________
Nope but the big dumb piece of $hit broke proper etiquette several times and one point walking in front of the queen. It may sound dumb and very royal but she is the queen and he is a lowly pleb. I’m not much of a royal watcher but she is “The Queen” Trump is a ugly dumb low life that invokes the “Ugly American” term every time he talks. “We have the best, we are the biggest, we are always first, my way or the high-way.”

Highway. No dash. Queen’s English.

#112 Old gringo on 07.13.18 at 3:12 pm

https://www.multiva.com.mx/wps/wcm/connect/GrupoFinanciero/Grupo%20Financiero/home …… almost any bank in Mexico offers over 7%, but this one was Multiva Banco

#113 NEVER GIVE UP on 07.13.18 at 3:13 pm

#84 Whimp on 07.13.18 at 8:40 am
#78 never give up. I agree 100% with you, this is so controlled it’s sick.
Anyway, I’m open any advice on how to game the system
====================================
#1. Try changing your handle from Whimp to Shark. That’ll make a difference right away!

#2 It looks like you could ace the test with the help of these flash cards and other help Free on the internet.

https://tinycards.duolingo.com/decks/25wRKcY2/bc-housing-owner-builder-exam-study-guide

It does not hurt to learn these things anyway because you will save on mistakes that a building inspector will make you reverse.

#3.Make calls to other small builders who may have certification who could for a small fee help you or even just get you through the process. If you are honestly in need of help there are people who love to help those in need. Just tell your story and see who comes to your aid.

#4 Brainstorm.
Things will happen like the advice from another poster about using a modular home, which could be safer and cheaper.

#114 tccontrarian on 07.13.18 at 4:34 pm

82 Tater on 07.13.18 at 7:51 am

So, how do you get protection when you have, say, $5M?
Open 5 different accounts?

—————————————————————-
Such a financial sophisticate and yet you’ve never heard of a custodian??

*****

Never had the need to know this Mr. Tater – but I anticipate that I will over the next couple of years.

A suggestion though…you may want to put your sarcasm aside for a minute – especially as you’re likely to get spanked over said time period.

TCC

ps. Did you get some TLT when it was 20% annualized gains (not including dividends).

#115 Tater on 07.13.18 at 4:45 pm

#112 Old gringo on 07.13.18 at 3:12 pm
https://www.multiva.com.mx/wps/wcm/connect/GrupoFinanciero/Grupo%20Financiero/home …… almost any bank in Mexico offers over 7%, but this one was Multiva Banco
——————————————————————
nevermind the FX risk, eh.

In CAD terms over the last year, those returns would have been cut in half. In USD terms, they don’t exist.

#116 tccontrarian on 07.13.18 at 6:09 pm

Re post #114

My post above reads:

ps. Did you get some TLT when it was 20% annualized gains (not including dividends).

It should read:

ps Did you get some TLT when it was below $118 mid-May? At $122.70 presently, this corresponds to >20% gains (annualized).

#117 Shark AKA Whimp on 07.13.18 at 7:15 pm

#113 never give up.
Thanks man! As your handle indicates, your a positive thinker! I don’t think I’ll keep shark, as a guy I know used it as a self proclaimed nickname and he’s a real putz lol, but that’s nothing to do with your good suggestion.
I’m just working with a friend that is managing for a construction company in town, they may be able to cover me. I don’t think too many contractors like to because of liability though, but since he knows me well, it may work out. Gotta make a descision this month.

#86 crowdedelevatorfartz.
I agree a mobile is a good option, when I found the lot, my first plan was to just slap a good used one on. I’ve got a designer that will let me install the septic field myself since I did utility construction for a few years and the neighbor has a mini em excavator I can rent. But, get this, when I asked the land owner if there are any restrictive covenants on the land, he told me he wouldn’t sell it to someone that was putting a trailer on it, because he promised the neighbors he wouldn’t. He moved 3hrs away though, so I could do it and tell the neighbors to pound sand, since there’s no covenants on the lot. I’ll see about building since a house would be worth more in the end, or I’ll just move somewhere cheaper to do it. Thanks for the links & info guys!

#118 Shark AKA Whimp on 07.13.18 at 7:35 pm

#86 crowdedelevatorfartz

I agree with you, mobiles are great for the price, fastest way to get mortgage free and used ones don’t depreciate much and newer ones are built well. My first plan when I found the lot I want to buy was to slap a mobile on it, but get this, when I asked the owner if there are any restrictions on the lot, he told me I couldn’t move a trailer onto it, because he promised the neighbors he wouldn’t sell it to someone that was going to put a trailer on it. However there’s no restrictive covenants on the lot and he moved 3 hrs away, so I could still do it and tell the neighbors that it wasn’t my promise, go pound sand.
Building might work out yet though

#113 never give up

Thanks!
I’m actually just working with a friend that manages for a construction outfit in town and I may be able to fly under their certs to get started, then I could write the exam. If you can believe it, there’s only 2 types. Of modular homes that are exempt for a homeowner to move onto a lot themselves without the HPO.
However, talking to this manager friend, he said he knows of a few people in the area that built in the regional district here without the HPO, guess it may not be enforced out here, but that’s a big risk
I’ll see what we can come up with this weekend
I’ll change my handle, stole Whimp from a snowmobile forum anyway, but don’t think I’ll use shark since an old friend that’s a putz used shark for his self proclaimed nickname lol, but you didn’t know that
Thanks for the info guy!, I’ll keep ya posted

#119 B Wilds on 07.14.18 at 8:06 am

I feel we are in uncharted waters and should take nothing for nothing for granted. To assume we will move forward without a glitch is extremely optimistic. With the passage of time, things change and evolve. This transformation can be seen in both society and the economy. A question we must ask is just how relevant today’s comparisons are with prior economic cycles?

The situation today is in many ways “historically unique” due to the rampant expansion of credit in recent decades. Recently I found myself pondering the line, “outwit and outlast” that is often used during the popular hit television show Survivor. It occurred to me the winners in both life and investing often reflect these qualities and that this game is far from over.